The U.S. wood pellet sector continues a trend of consolidation. Enviva’s recent acquisition of Colombo Energy and Rentech’s bankruptcy serve as the most recent examples. Consolidation of wood pellet producers has taken place in three main ways: organic growth, attrition, and acquisition. Or as in the case of Drax’s purchase of LaSalle—previously Louisiana Pellets—it could be a combination. LaSalle was purchased out of bankruptcy on April 3, 2017, and, after capital improvements, is now operational again as of November 29, 2017.

On January 2, 2018, Enviva announced a new joint venture with Hancock Natural Resource Group, Enviva JV Development Company, LLC. Through the new JV, Enviva is expected to close on the acquisition of Colombo Energy—a subsidiary of the Navigator Company—in the first half of 2018. The over 400 thousand metric ton facility, which exports through Enviva’s Wilmington terminal, is located in Greenwood, SC. The acquisition will increase Enviva’s production capacity by 15%. The company previously developed both the Sampson and Hamlet, NC, facilities as well as the terminal at the Port of Wilmington through a joint venture with Hancock.

Rentech filed for Chapter 11 bankruptcy on December 19, 2017. The day before the company entered into an agreement to sell its New England Wood Pellet business to Lignetics. The sale will include four wood pellet facilities—Schuyler and Deposit, NY; Jaffrey, NH; Youngsville, PA—with a combined capacity of ~270 thousand metric tons. Pending the Court’s approval, the acquisition will almost double the production capacity of Lignetics, increasing it by 46%.

Seven companies represent close to 70% of U.S. wood pellet production capacity (Figure). Six of these top seven wood pellet producing companies focus on the export market and operate out of the U.S. South. These companies represent 90% of Southern wood pellet capacity. With the acquisition of Colombo, Enviva alone represents over 25% of total U.S. wood pellet capacity and 40% of Southern wood pellet capacity. The company is further expanding through the construction of its 600 thousand metric ton facility in Hamlet, NC, which is expected to be online by the end of 2018, and an announced 100 thousand metric tons expansion at its Sampson, NC, facility.